Asking Rents Drop

One of the theories put out there by some is that as the housing bubble collapses rents will go up as people will start to rent over the long term commitment of buying a house. That might hold true when rental stock was in low supply and demand outstripped it. The problem is that the housing bubble grew on the backs of wannabe buy-to-let specuvestors who didn't care that the rent fell short of covering the bond (because capital appreciation is what they were counting on), or who kept the flat empty as they tried to sell their off-plan purchase once constructed. When that doesn't work they either have to keep it empty or try and rent it out and cover some costs. The result: a whole bunch of rentals on the market (especially in new developments) and rents either remaining flat or dropping.

For instance here's a 2 bed apartment in the Mutual Heights development. The asking rent in November was R12 000. In December the asking rent for the same flat was R11 000 a month.